How to Design a Business Plan For Investors
Blog Post (with free checklist)
A Common Misconception
So you’ve presented your idea a handful of times, and you’re prepping for the next pitch. You’ve done your research, and you know quite a bit about the investors you’ll be pitching to.
The natural tendency is to modify your business plan or proposal to sound more appealing to this new audience.
Stop. Take a word of advice. Don’t fall prey to the temptation to adapt your business plan to fit investors. I’ve worked with many entrepreneurs, and this destructive tendency does not bode well.
But before we get into the details, I want to pause here with a helpful tip: Don’t fear rejection above all else. A single “no” isn’t your be-all-end-all. Pandora’s co-founder Tim Westergren was rejected over 300 times before securing funding.
The Dangers of Modifying Your Business Plan for Investors Each Pitch
Although a bit of tweaking is ok, be careful when headed down this slippery slope. You don’t want to lose sight of your idea in the process of over-catering.
It’s perfectly alright to find out what investors care about. This way you can emphasize the part of your plan they’re most interested in. (And if you’re unsure? Just ask them candidly so you can get down to business.)
Remember, your business plan is a clearly defined explanation of your idea. Don’t modify it to fit the audience. The result could be devastating. Even if you do successfully secure funding with an enhanced idea, you’ll find yourself completely unprepared for that new access point.
A Better Alternative
The solution? The answer isn’t to change your idea. Instead, change your audience.
Resist the urge to cast as wide a net as possible. Instead, pitch to the right audience.
Aim for a smaller number of investors who seem to be well-matched to your startup.
Keys to Finding the Right Audience:
- Don’t waste your time pitching to someone who is clearly not interested in your startup type. Your energy is better directed toward someone who is a proper fit.
- Many investors will make clear their preferred sector. Find someone who accepts new ideas, by asking questions like: “Do you look at external ideas?” “Would you mind if I sent you some of my ideas?”
- Do your research. Be engaging. Be personable. Just don’t lose yourself in the process.